tv Bloomberg Markets Bloomberg February 11, 2020 5:00pm-7:00pm EST
taylor: welcome to "bloomberg markets." i am taylor riggs in san allen in with paul sydney. ♪ up in the next hour, dire situation. officials try to stop the coronavirus advance. the situation aboard some cruise ships is getting grim. countries are denying entry. primarye new hampshire is underway. we will see how the front
runners and underdogs are faring. softbank is smiling. softbank made about $12 billion after sprint stock rocketed. this after he judge ruled in favor of the sprint-t-mobile merger. let's look at how markets fade. another day, another record high from the s&p 500 and nasdaq. lyft are lower in after hours trading. they did not get an update on profit guidance yet. the stocks index, the chipmakers leading all these record highs. rate the s&p% remains near record valuation. of course, we heard from jay powell. year yield is 10 getting a lift. is appropriate
for now, that means that safe havens are kind of fluctuated. left --ting a small gold getting a small lift. paul: we are expecting more gains on the asx when we get going in an hour. we will be keeping an eye on commonwealth bank just reporting first time cash profits just shy of $45 billion. that is a big deal because it makes up just under 10% of the asx. nikkei futures are pointing higher by 0.8%. we will have money supply and machine orders. keep an eye on the new zealand dollar, currently hovering above
$.64. it is expected to keep the cash rate on hold today at 1%. the aussie and the yen pretty much unchanged. casesmber of coronavirus continues to rise, now standing in more than 43,000. the world health organization have given an official name to it right now. selina wang has the very latest. : we do know have a name for the virus. is called covid-19. you do have the organization hosting a meeting of hundreds of scientists around the world to
outline the priorities here. the first vaccine the director general mentioned is at least 18 months away. toy are increasing supply diagnose patients. delay itsset it may purchase of farm products because of the agricultural minister saying the import outlook for savoy would eventually be fulfilled -- for soy would be fulfilled. decrease the impact to the economy, china has been trying to get regions which have not been hit as hard by the virus to resume as soon as possible. gdpmedian estimate for 2020 fromow fallen to 5.8%
5.9%. why want to zoom in on one area, the elves sales injury. -- the home sales industry. banned homehave sales, restricted home construction. in beijing last week, less than four units per day result compared to typically -- per day were sold compared to typically hundreds. taylor: jay powell is saying that the coronavirus outbreak is being carefully monitored. >> we are closely monitoring the emergence of the coronavirus, which could lead to disruptions in china that could spill over to the global economy. taylor: did you hear anything today from jay powell on the
coronavirus that give you any indication of how much of a hit this could be? >> the chairman was pretty tightlipped when it came to some of the international risks. he did acknowledge that it is a risk to the downside that the committee will be keeping an eye out. the extenttalk about of the impact, the different industries being it from labor, tourism, retail. he just said, it is a downside risk and we are in the early stages of understanding the impact to the chinese economy and global economy. risk, what downside would it take in the global economy to take jay powell to
move and intentionally cut rates ? >> there is potential for this to affect all areas of the supply chain. the question is, how deep of an impact and how long of an impact. at this point, we know that the u.s. economy is still on stable footing, but there are some signs of weakness. if you couple that with uncertainty and risk from the global outbreak, we could see the fed forced to take action. i think it is reasonable to expect action in the middle part of the year. paul: let's talk about some of those other signs of which is. -- of weakness.
is unstable. this there is a little weak inflation. on rates reliant anyway? >> the chairman was really focused on the positive aspect of the recovery. on the flipside, we have seen manufacturing now at very dismal levels in the past six months. business investment trending negative for the past nine months. there are a lot of question marks about the ability for the recovery to continue. 2% is hardlyout, impressive when it comes against the backdrop of bloated balance sheets. looking at these stimulative conditions, we should be
expecting the economy to be growing at a 3% or 4% pace but we seem to be celebrating mediocrity. paul: some risks on the fiscal side as well. therman powell urged federal budget to be kept on a sustainable path. insident trump, $1 trillion deficit spending. what are some of the risks around that? liability,es a meaning we will put more and more burden on american this is an consumers to cover -- american businesses and consumers to cover that shortfall. the chairman was talking about this as weakness seeping into the economy in the near term. they have very limited tools in the arsenal to combat weakness.
175, which50 to means we could quickly get to meaningr bound of zero, fiscal policy they have to step but therelement, could be limited appetite for additional fiscal stimulus. the 10 year, yesterday, inverted by one basis point. three-monthrted different this time around? thate vice-chairman warns an inversion does raise warning signs in the global economy. it is certainly something the fed officials are watching. the traditional metric we watch,
and inversion which we did see in the middle to late part of 2019. thever, i don't know that yield curve has the predictive power that it once did given the tremendous amount of monetary policy intervention, it could be argued that it has eliminated some of that predictive power from the yield curve. as anr, it could be seen indication that policy is still too tight, giving another area of support for the fed to lower rates. thanks so much for joining us. still to come, senator bernie sanders open to cruise to victory in the new hampshire democratic primary. the latest numbers, next. this is bloomberg. ♪
paul: this is "bloomberg markets ." let's check in on the first word news. saysd chairman jay powell policymakers are on high alert, saying he is ready to act if needed. haveid the infection will impact on the u.s. with the only question being the scope of the damage. the european union has rejected london'ss request for financial services sector to retain continued access to the market. demandingury is picking equivalents. barnierotiator michel said there will not be any open-ended between the sides. thes johnson has won
backing of the bank of england. governor mark carney says he welcomes the government focusing on production in richer areas of the u.k., saying that if the rest of the country could match the city of london, the economy would be larger by one third. indian prime minister narendra defeatbjp have conceded in the deli -- in the delhi election. ran andu-nationalist bjp aggressive campaign but has for 40to win delhi years. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.
taylor: i want to bring you some breaking news. province has reported 1600 new coronavirus cases on february 11. now it is reporting an additional 94. 33,000 366.sing to the total china death toll rising to at least 1110. we will bring these numbers to you as they develop. i want to turn our attention back to the u.s. presidential race where we are awaiting the results of the new hampshire primary. the latest has vermont senator bernie with a 10 point lead over his closest rival, vice president joe biden. david, what is the tone on the ground? polls if you look at the
for new hampshire, bernie sanders has a lead, maybe as much as seven or eight points. you have to be careful in new hampshire, there can be late, breaking developments. then you have amy klobuchar around 11 points. we know that joe biden just left the state. i have to say, overall, i would say there is kind of a subdued tone. we'll see what the voter turnout will be. taylor: this question is not a joke. when does joe biden dropout in your opinion? leadingnot seem to be in any of the recent polls. david: he is not. he is leading in south carolina and he is basically ahead in nevada. he says he appeals to a broader
range of americans that iowa and new hampshire. he thinks he will do better in south carolina and nevada. he thinks that is important. your point, he is running out of money. when you get into super tuesday, money counts for a good deal. paul: the firewall you budget, is it as strong as they say? there is some evidence that african-american support seems to be dropping for joe biden. david: the question is, can he turn that around? maybe that is why he decided to get out of town early and head to south carolina. it certainly is quite a dramatic turnaround. this is the man lead in the national polls from the beginning and he was number one consistently up until the last
few days. do need to discuss mike bloomberg, was of course the founder and majority owner of companyg lp, the parent of bloomberg news. he may be able to debate in nevada. david: the rules were changed so it takes four nationally recognized polls. mike bloomberg has three of those at needs one more to qualify for the next debate. mike bloomberg, he has the money. he had tom steyer consult fund. and let's be clear, from the beginning, he said his strategy was to skip iowa and new hampshire and really target on super tuesday where there are so many delegates available.
taylor: i want to look at a chart i am showing here. basically the probability of the next democratic nominee. 45% odds going to bernie sanders. what do the people of bio and new hampshire cna bernie sanders iniowa and new hampshire see a bernie sanders? david: sort of the way donald trump has, not a majority, but a very passionate minority. bernie sanders attracts a passionate minority that wants fundamental change in how we run our economy. muches not seem very appreciated by those in the business world. ,he question for bernie sanders can he expand that beyond where it is?
heret 40% of the voters are independent at if they break, they might break for a moderate instead of bernie sanders. paul: thanks for joining us. we will have special coverage of the new hampshire primary later on today at 7:00 p.m. in new york. with to come, lyft is out fourth-quarter results and beat expectations. this is bloomberg. ♪
that the profit target remains firmly in the fourth quarter of 2021. uber'syear later than target. --c: over has the advantage uber at the advantage of having earnings first. we are talking about adjusted profitability. cuts out a lot of things. is still growing impressively. i think it was something like 50% of the got to a billion dollars in revenue. they have this advantage of being smaller. time.as had in particular is
focused on business customers. it seems like lyft does not want to commit to the same timeline. scarlet: the profitability target -- taylor: the profitability targets, justin , to analysts care that it is supposed to be ebitda probability? >> at some point, it is shocking . was somethingt like 4 billion. uber is a company that loses a lot of money. the reason why we focus on these adjusted ebitda numbers, it allows analysts to get their head around how the company makes money.
that is sort of the framework that the markets are paying attention to. there have been huge stock expenses and other expenses. here part of the problem is that they are simply getting saturated. you can't start getting consumers to take more rides. ofc: lyft has the advantage growing into a market that is bigger than the company. you are still seeing it grow into new active riders. uber, you heard them over and over again say they were going to use the law of large numbers. has gone intor food and other industries in a way that lyft has not. lyft has been focused.
for the time being, it seems that they need to show they can run a profitable ride-hailing business. paul: how about on the cost side? lyft already said it would cut 90 jobs. is this the start? matter,rporate jobs certainly symbolically, but at the end of the day, the story here is price competition, how groundd lyft gain relative to each other. that is why i think the stocks have been so related to each other. there has been a price war going on. that q1 wouldaid be sort of peak loss. if subsidies come down, what is the market for ride-hailing?
paul: this is bloomberg markets. i'm paul allen in sydney with taylor riggs in san francisco. let's get a check of first word news. ritika: the coronavirus outbreak is set to cost china billions of dollars. reports say it may have led to losses in retail and food sectors stretching into the billions, including losses of 80% over the lunar new year, representing as much as 220 billion dollars, as outlets were shot across the country. hong kong has suspended all cross-border land transport between the airport and mainland
china until further notice to try to stem the impact of the coronavirus. the decision comes as governments take action to restrict travel and other cross-border links, with virus deaths topping 1000 on showing few signs of slowing. hong kong has already imposed quarantine curbs on mainland travelers. bernie sanders opens a commanding lead in the democratic presidential race, head of former vice president joe biden. ahead of today's new hampshire primary, the monmouth university poll gives him a 10% lead, with support of more than 25% of democrats nationally, with biden slightly ahead of pete buttigieg and elizabeth warren, the survey is in line with other surveys. facingive financier is more charges related to the 1mdb scandals. he is accused of a criminal conspiracy with the former malaysian prime minister. in an inquiry into potential losses of billions of dollars
u.s. prosecutors estimate at least $4 billion was siphoned db fund.1m low faces up to 20 years in jail. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'mriddick a group -- ritika gupta. this is bloomberg. taylor: washington has raised its travel advisory to hong kong, warning of increased caution and the state department is allowing nonessential personnel in hong kong to depart. we will go to yvonne man. yvonne, what is the latest? yvonne: taylor, the level to travel advisory now from the u.s. to hong kong, still far from the level for advisory the u.s. as on china right now, which is the highest level --
for travel to hong kong advisory the u.s. has on china right now, which is the highest level. his 62-year-old woman in public housing also contracted the disease on the building was forced to evacuate tuesday. u.s. state department letting nonessential diplomats and theyies leave hong kong if want to, and hong kong is also stepping up travel restrictions, the airport suspending ground travel services to the mainland, so coach buses that travel to cities like shenzhen and macau are temporarily shut until further notice. taylor: there is also the latest about a cruiser -- a cruise liner rejected five different ports over concerns the virus may be on board. what is the problem with the cruise ship, and what are their options?
yvonne: the company says there is no reason to believe there are any coronavirus cases on board, this goes to show the stepping governments up protocols here, and the struggle they have in terms of containing this virus. most people think of the diamond princess, where 135 people tested positive for this disease, but when it comes to the holland america line, they are running out of options. experts say they may be forced to wait until the vessel basically goes into distress, when they run out of food and supplies, before these laws of the sea conventions kick in, and basically the country closest to the vessel will be legally obliged to provide help. we saw arrays of hope for the who, saying they could be sending health officials unborn to check passengers soon. saying, whens also it comes to the quarantine on
these cruise ships, as we have seen several cases already, that they could actually present issues when it comes to the in particular, so they are exploring the safest option at this point. paul: yvonne, the pace of new cases seems to be slowing, but all of this is going to take a long time to work its way through the supply change -- supply chain a. what is the latest on the corporate fallout? yvonne: we heard from airbus resuming production at its factory in shenzhen, but airlines continuing to suspend china, to hong kong and american airlines suspending u.s. flights to shanghai and beijing in los angeles to hong kong until april 24, so a month longer than planned. the airline said it was due to decline in demand. dallas to hong kong will also resume around that same time, but that is two months longer than expected on that route.
when it comes to the mobile world congress, that is hanging by a thread now after a list of tech companies are dropping out. the event was set to kick off board to any fort ash february 24 -- february 24, the likes of intel, sony, at&t all canceling plans now. organizers tell us there will be a video call friday to assess contingency plans and whether the event can go on. markets anchor yvonne man in hong kong. thanks so much for joining us. in the face off with coronavirus, china is redoubling efforts to shore up growth. on tuesday the finance ministry set out new quotas for fundraising. david ingles has details. david, how much are we talking about, and is it going to help? the new quota is 120 2 billion u.s. dollars. we understand that first they are going to bring it forward, so it will start earlier, and it
will be a little larger as well in terms of what they are allowing local governments to raise in the bond markets. of bond of 120 -- the bond 122 billion u.s. dollars, the risk is made up of things like special-purpose bonds, which essentially goes to infrastructure spending, health industries, what have you. the reaction from economists at bloomberg economics is actually that it reinforces the already cemented street view that support will come in the form of fiscal measures aided by monetary policy. what that might lead to is a wider deficit. they are talking about 3% of gdp for 2020. interestingly, it also indicates the fact that they have now come out with a budget, that the npc, national people's congress, where they lay out growth targets, usually held around early or mid march, might actually be delayed.
that is accorded to bloomberg economics again. in which case though, they say it will not delay stimulus measures being put in place. in terms of markets, the moving average, i think the chart shows that, turnover has been exceptionally high as people are stuck at home. that is prompting retail investments to come back into these markets. back to you. taylor: thank you to bloomberg's david ingles. coming up, breaking up big tech. u.s. regulators demand companies turnover data on acquisitions both big and small. that is next. this is bloomberg. ♪
bloomberg's su keenan in new york. su: the news from the fcc that they are going to look at acquisitions from big tech companies threw cold water on market action. we saw the market managed to regroup and close higher, but look at big movers, facebook and microsoft to hard by the realization you have the government asking for information. defeat health care came in with strong earnings, analysts taking targets up, in line with a lot of gains on health care, one of the stronger groups. t-mobile, a big victory in court, defeating the final hurdle, the final lawsuit to their multibillion-dollar merger with sprint. and check out sprint, surging 77% and softbank, parent company, a big winner because if this hurdle had not and mounted, softbank may have had to bail sprint out. andr market action, lyft
bed bath & beyond, big disappoint on earnings goals they are facing. check out the bloomberg, banking on a breakout is the name of the chart. thefed chairman now says fed is closely monitoring the coronavirus, and there is a view in the market that the fed will one if there is any impact the u.s. economy. a lot of charts are showing banks are set for a breakout here. they have 12 point 5% waiting on the s&p 500 and that actually could be a positive indicator for gold. taylor: thank you. with -- speaking of the federal trade commission, they want to know more about big tech and acquisitions, specifically ones that may have eliminated emerging competitors. the ftc told five companies to provide information on deals not reported to antitrust agencies. alphabet, facebook, microsoft
among the companies. joining us now is michael levine. you cover alphabet, amazon and facebook. who in your opinion is more at risk from the ftc announcement? michael: facebook for the top of the list, and i am looking that -- at that in conjunction with hearing they were going to seek an injunction to the end of last year, trying to stop facebook from tying together different messaging platforms. if you think about, were that to a note aboutwe had this at the end of the year, a lot more revenue than people appreciate. would: what acquisitions we be talking about and facebook's case, whatsapp, instagram? michael: i think that is it, whatsapp and instagram. those other ones. taylor: what are the implications, a threat from the
ftc is one thing, antitrust action and a real breakup is another. what are the odds of real action? achael: even if they bring case, it would take years in the courts. moreook, we have gotten negative on the stock on the basis of fundamental work we have been doing combined with a disappointing q4 and outlook for the year. it has been one of the things that has kept us on the sidelines with regards to multiple, and i think we will continue to act on that. if we are right on the fundamentals, you will see the multiple conceivably be driven even lower. paul: is it possible there is simply nothing to see here? regulatory risk come with the territory of tech investing? michael: i think there is something to see. there is pretty clear dominance within the social space.
one of the things that has been so remarkable about facebook is this ability to leverage data across different platforms. mostprobably are the monopolistic by way of comparison. -- to yourr point earlier point, we are positive on google, i don't want to brush under the covers that you could conceivably have issues around the double-click unit, but we are reading between the lines and you such after a couple of weeks ago suggesting that might opinion, as ar means of appeasing the regulators, conceivably when they spin off double-click, which we think would be a pretty big win. paul: other significant pressures are coming down the line for facebook, particularly in terms of google's decision to block third-party cookies. michael: that is something they talked about so simply on their seeings call, they will
more headwinds relative to what they have seen. something we missed end a lot of the street missed is that when apple introduced ios in q4, they started to see some loss of signal with regard to location-based data, but google rolling out the changes on february 4, obviously a big change in terms of what could happen with regards to their access to signal. one thing that turned our head and pushed us over the edge downgrade was facebook, the following day, going ahead and saying they were going to pull back dramatically on the face back audience network. it is not that that actually has a huge revenue contribution or huge margin contribution, but we thought was basically an admission they recognized they are going to lose signal and are trying to get ahead of it. taylor: i want to look at a chart i am showing inside my terminal. you mentioned this the first
time, the valuation, facebook looked cheap because of multiple compression you have seen really going back five years. 2019 was supposed to be the investing year. 2020 expectations for the company were so high. what did you hear on that call that made you downgrade from a cell to a hold, and rethink this? ,ichael: a couple of things taylor. we were talking to quite a few large agencies, large advertisers, other publishers over the past week, and for us it was seeing a combination of the fan announcement, we heard from a couple of large advertisers that they thought this was really a seachange and yes, they are very smart, they will find some degree of work around, but you are going to unquestionably have some degree of degradation in terms of signal. taking a look again at what they said on the earnings call, and to boot we had a note out and we
alypse on as cookiepoc monday, and had quite a few conversations with folks across the industry. in terms of our downgrade, we had pushback from investors citing the stock as being cheap. we did not have a lot of pushback at all from industry participants, a sizable amount of our distribution. taylor: i finally figured out how to say the word cookiepocaly pse, and then we get to dtc implosion, direct to consumer. what is the shift related to dtc? to say. it is hard facebook is generally said, we have $8.5 million advertisers -- we have 8.5 million advertisers, and we don't think that is a huge part of their revenue base, a few billion dollars, but if we look at the tea leaves over the last six months, you see the we
works implosion, casper actually got out the door but to us it was a suggestion they had no other option's -- no other options. i can't envision bankers saying, we think this deal is going to go over well, and that was a company that did $1 billion, north of that, in march of 19. you put together a number of the signposts and a lot of these companies who are big advertisers on facebook don't really have good underlying economics, so the rationalization is inevitable. one additional prompt that could push this rationalization is, a decline on facebook, an important channel for then, maybe this is one more thing that leads the funders to say, aside from hoping somebody purchases us, i don't know if this a good business for us to continue to plow money into. levine of pivotal research, thanks for joining a spirit still to come -- joining
♪ taylor: let's get a quick check of the latest business flash headlines. boeing failed to win any orders for commercial airplanes in january, the second month in a row it has seen no interest in its jets. the decline has strained boeing finances since two deadly crashes grounded the 737 max. a slow is traditionally month for playmakers, but boeing shipped only 13 preordered jets last month, compared to 46 during the same, year ago.
under armour plunged after warnings of soft 2020 results and said it is considered a restructuring -- considering a restructuring plan. the company says revenue will fall by low single digits and earnings will be far below forecasts compiled by bloomberg. first quarter revenue of $1.4 million -- $1.4 billion also missed forecasts. ♪ medic alarm will be want to watch after reporting a four-year loss that narrowly beat estimates. good doctor's shortfall was the equivalent of $105 million, lower than the projected $123 million. at 717venue came in million dollars, head of expectations. good doctor says as long as the epidemic consultation service amid the coronavirus outbreak. that was your business flash headlines.
t-mobile and sprint have been staring their merger through a regulatory maze for nearly two years. now they could be reaching the finish line. the companies say they expect to close as soon as april 1. joining us in new york is bloomberg intelligence senior analyst jennifer reed. surprise how much of a was this? you and i spoke a lot and we thought a lot of the favor was in the state. what happened? jennifer: the decision was a surprise among antitrust analysts and lawyers looking at this case. it was an unusual decision, because rather than taking each of the company's defensiveness to what was presumptively and anticompetitive deal based on the combined market shares at what we call boj chai index, commonly used to assess a deal, no defense on its own met the test set forth in doj guidelines. instead what the judge did was, if you take them all and put
them all together, taken together they always against this, they rebut this presumption that the deal is anticompetitive. also the judge excepted remedies of the department of justice, ftc imposed to divest assets to dish and set up dish as another competitor in the market. taylor: who needed this deal more, sprint or t-mobile? jennifer: absolutely sprint. if the deal had not gone through, t-mobile would have been able to continue the profitable path -- the profitable path that has been on. in aprint was definitely difficult spot. they had reputation problems, network problems, they had that, and they were in a position where, especially with the advent of 5g, they weren't ever going to get them selves to a place where they could compete viably with the other three, verizon, at&t and t-mobile. the big winner is softbank and sprint in this case. build onust wanted to
taylors question -- on 's question. jennifer: this was really needed, this deal. they should thank john legere for this. i attended a lot of the trial and some of that genius, and the force of his marketing personality, definitely came through and helped the judge assess this evidence. maverick decided the strategy in the corporate culture john leger generally built into t-mobile was really going to continue, even when it was a larger company combined with sprint. sprint was really lucky in this decision today, given what they have been going through. in terms of the vision have management urging softbank to go ahead with
a buyback and prove its transparency. does the completion of this deal in april make it likely some of those things are going to happen? jennifer: i would think so. it is straying a little outside my area, which is antitrust analysis, but yes, i would think so, it looks like the completion of the deal will stop putting things in place -- will start putting things in place for softbank. senior bloomberg intelligence analyst dent jacks jennifer reed, thank you. still plenty more ahead in the next hour of bloomberg markets asia where we will be joined by david from capital management. paul: the outlook for softbank earnings is due out later today. we will get analysis from amir anvarzadeh from assymetric advisors. at the top of the hour, australian markets opening, futures pointing higher, keeping an ion commonwealth bank, the largest listed corporation on the sx reporting earnings today -- the asx, reporting earnings
and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. whether you're travelling around the country or around the house, keep what you watch with you. download the xfinity stream app and watch all the shows you love. beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity.
every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. ♪ good morning. i'm haiti stroud-watts -- haidi stroud-watts in sydney, markets have just come online. i'm shery ahn in new york. welcome to "bloomberg markets: asia." ♪ haidi: the coronavirus numbers continue to rise, and human and economic damage is escalating.
is fed chief says he watching the virus's impact closely but jay powell says the u.s. is in a good lace. in bernie sanders is in pole weition in new hampshire, have the latest on the democratic primary. news out ofing south korea, the jobless rate coming in at 4%, which is higher than the estimate of 3.8%. also a higher unemployment rate than the previous month of december. when it comes to jobs added in the economy, 568 thousand for the month of january, versus 516,000 in december. gainse seen some of those slow down as the coronavirus outbreak hits china's tourist arrivals and also ways on sentiment. this will impact demand for south korean exports. we have seen a little support withfrom the government
its budget, which it says it plans to frontload in the first half. for now, haidi with its, the jobless rate and south korea and looks like has risen to 4%. haidi: a key concern for policymakers in south korea, especially if we break it down and look at youth unemployment let's look at the markets, australia coming online after u.s. stocks pushed back on that edging to aflurry, high. flat stocks insignia, watching bank of australia, the lender reporting better-than-expected results for the first half, the recovery in the housing market domestically is one to watch and australia. avianaland, we have the bird decision, the director expected to hold the cash rate at a record 1%, but really watching for guidance and signaling because the economy has been impacted by the
coronavirus effect. looking at nikkei futures as japan comes online after the public holiday yesterday, a little more positive, the nikkei also the futures session, been futures trading in the usp let's get first word news. haidi. thanks, hong kong suspends land transport between the mainland and china as the government tries to stem the impact of coronavirus. the decision comes us governments take action to restrict travel cross-border links, with virus deaths topping 1000 and showing few signs of slowing. hong kong has already imposed quarantine curbs on mainland travelers. ♪ powell says rome policymakers are on high alert about the coronavirus outbreak and says he is ready to act if needed. addressing lawmakers on capitol hill, he says the coronavirus will have an impact on the u.s.,
the only questions the scope of the damage. how lads he remains optimistic about the u.s. economy. ♪ bernie sanders opens a commanding lead in the democratic presidential race, head of former vice president joe biden. ahead ofthe unit -- today's new hampshire primary, a monmouth university poll gives bernie sanders support from 25% of democrats nationally, a poll broadly in line with other surveys. low facesfinancier joe charges related to malaysia's 1bdm scandal. in an inquiry into the potential loss of billions of dollars, u.s. prosecutors estimate at least $4 billion was siphoned fund.e 1mdb investment the accused face up to 20 years in jail. global news, 24 hours a day, on
air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ shery: thank you. the number of coronavirus cases continues to rise, and now stands at more than 43,000. our china correspondent selina wang is in beijing. despite new cases, it is the slowest pace of new cases of the coronavirus infections since february 1. how encouraging are the latest developments? selina: experts say it is too soon to tell, but hubei province reporting a significant number of new cases today, but lower today, but lower than the number of two thousand cases reported in recent days, the death toll now rising to 1100, the total number of cases in hubei province writing to 33,000 -- rising to more than 33,000.
we had the world organization health rethink where the director general finally gave the virus a name, it is called covid-19. the director general said it is important to give this virus in official name so that other names don't emerge that can be inaccurate or stigmatizing. the organization is hosting a meeting of 100 scientists from around the world to figure out a research roadmap and figure out what health priorities are here, a vaccine still at least 18 the worldy, but health organization sending supplies to other countries to diagnose and treat patients, and here in beijing, the streets are still much emptier and quieter than usual, although some businesses artificially restarting, citizens are still dealing with inconveniences in their daily lives and are feeling suffocated. there are's l stringent rules
across the country and one of the most common restrictions is lockdowns uncommon residential areas. one city and shanghai try to implement a rule where residents can only send one family member outside once every four days, so pretty strict. haidi: what is the impact on trade and economic activity? significant impact on trade and economic activity in china. will likely reach the targets in the face-one trade deal, the soy outlook remains on track, but there have been but theor corn sales chinese government has been
urging regions less hard-hit by the coronavirus to accelerate production as soon as possible, but there are massive challenges. you have many companies and factories getting tied up in local government regulation, for instance they didn't have enough masks, sanitizer or protective equipment to restart a factory and they can't do so because they have been shortages in some reasons of those goods. regent -- regions of those goods. some employees are stuck because of travel quarantines. so the economic forecast is now 5.8% for 2020 gdp, from 5.9%. for that,ank you selina wang our china correspondent in beijing supply chains may suffer longer than spec to disruptions because of the current environment. this is china tries to nine giles factories back to work to limit the economic damage.
joining us now is our guest to talk about the fear. what is your take as to whether adequately,reacting or not accurately, or are too sanguine about the sprawling impact the coronavirus threatens to have globally? that seemed at the onset the market reacted in a way that we would have expected, that we had uncertainty in the market in the market hates uncertainty. it was an unknown as to what the coronavirus would me to markets globally. we saw a reaction to global markets over about a weekend a half, certainly after the lunar new year holiday when china reopened and had a chance to react. we saw the csi 300 down 9%, finishing down about 8%, then recovered after couple of days with that massive stimulus measure by the pboc. but since then here in the u.s., we have seen markets recover,
emerging markets recovery, and asian markets and china's market do better. i think there is a question now, are the markets becoming too sanguine, too complacent about the coronavirus? i had some question about that late last week as we saw markets become a little more volatile. there are still unknowns as to what this epidemic or pandemic, how it will nana fast itself here in the intermediate term -- how it will manifest itself here in the intermediate term, but markets here in the u.s. are largely looking past it and moving on as if it is not going to be that great an impact, which may be underestimating the impact. taylor: -- haidi: are we underestimating given that we know how globalize the economy is, and that asia
has already seen disruptions? are we underestimating the impact this is going to have on this earnings season and the next? david: it will certainly have an impact on this earnings season, for this quarter in the next quarter at least, and we are seeing that and guidance coming through from a lot of companies around the globe, and companies here in the u.s.. i think that the magnitude of that and the lasting effects of that will probably be largely realized, or we will be able to estimate a lot more, in the coming two or three weeks, because that is when we will see if some of these factories are able to come back online, and ofse gaps we see as a result supply chains around the world, auto industry, whether in the tech industry, if these gaps start shutting down plants and really disrupt supplies for those products they are going into around the world, we will
know that very soon, within the next week or two. shery: and also a more macro economic impact of supply chain disruptions could be prices of food and goods rising at the same time. will that tied the hands of central banks around age of the perhaps could have given a boost to the markets? yeah, that is the catalyst that his been all important in this, the central banks, the interplay they have had. specifically when we look at the people's bank of china, that massive stimulus the first day, the largest one-day injection of liquidity since 2004, then followed with more massive stimulus on the second day that helped us move the impact of the virus on china's markets. then we have had massive stimulus here in the u.s..
some recent data, we look at year-over-year change in liquidity injected into the u.s. system by our federal reserve, and it is the largest year-over-year of 12 month increase in liquidity in 50 years. so the amount of central bank stimulus around the world, whether the bank of japan, ecb, pboc or the federal reserve here, those for central banks alone, the amount of liquidity going into the system now -- thee 4 central banks alone, amount of liquidity going into the system now is massive and i think you will see more of it to curb the impact of the coronavirus on economies, that the ultimately impact effect on stock prices. mainstayvid kubla, capital management founder, you
are sticking around, we have plenty more to discuss. coming up, the outlook for softbank, the earnings do is the senior asset management for abu dhabi joins us later. haidi: bernie sanders likely to cruise to victory in the democratic primary in manchester, new hampshire. we are live for manchester with the latest numbers. this is bloomberg. ♪
>> we find the u.s. economy in a very good place, overall background strong job creation, all of those things, all of this happens in the context of a good, strong, u.s. economy. shery: fed chair jerome powell sharing his views on the u.s. economy. let's get more insight on fed policy, still with us is david could luck, mainstay capital management founder and chief
asset strategist. let's talk about powell's testimony, because he seems mostly positive about the u.s. economy. is that give you more confidence about where equity markets could go from here? david: yeah, it does. cuts last three rate the fed,emptive by they called it a midcycle adjustment, and it seemed to be timed pretty well. leading into 20/20 and before the coronavirus on what that means to global economies, and the u.s. at look like we were in a goldilocks economy. we had reasonable growth, not very strong but reasonable, jobs still coming in quite good, last two jobs reports were quite good, reasonable gdp growth at around 2% for last year, and
unemployment still near 50-year lows, our most recent read, and the consumer is still pretty strong, so we are in a pretty good place, with the fed remaining very accommodative, so we are in a good place for the u.s. economy. that was reflected in the statement, and i agree. shery: contrast that to the international environment with the coronavirus and ongoing trade tensions. that you say domestically-focused small companies could be a better bet than those large companies with more businesses overseas? david: well, i don't, i don't think that. i think the environment we are in right now, two questions in there. the first part, we saw at the end of the year that it looked like, with pmi around the world, that the global economy was
starting to recover, we were starting to see what looked like a rebound of global economies, and the coronavirus may have disrupted that to some degree. and that has yet to be seen as to how severe that impact is on the global economy. in terms of where to invest, what we have seen on what we believe is that the major catalysts for u.s. stocks and most stocks around the world is central bank stimulus, liquidity injections into the market. we are at a pe of 18.8 right now in the u.s., pretty rich by historical standards, and the market keeps marching ever higher. and i think that is a large result of liquidity being pumped into the market. where does the liquidity go? large cap growth stocks, the large liquid blue-cap stocks. stocks looke value attractive, small caps look attractive, but we are primarily
focused on large, blue-chip stocks. and if you look at where the action has been, if i can use that phrase, year to date two thirds of the return of the s&p stocks,n four google -- apple apple, google, and amazon make up two thirds of the s&p 500. mega cap stocks. noti: if demand is destroyed, just delayed, are we set up for a stimulus-driven recovery at the end -- at the other end of this? anyin that case, do you buy short-term corrections? david: yeah, there is an opportunity. the human tragedy aside, when we get to the other side of this, there is differences between the coronavirus and sars, and there
may be a little more demand destruction this time. sars, there wasn't demand destruction, it was just demand delayed. there might be a little more demand destruction this time, but it will primarily be more demand that is delayed. on the other of this there will be real opportunity, and that opportunity will be a tactical opportunity for investors. and that, with stimulus, could be a real opportunity for investors. haidi: david, we have to leave it there, david could luck, mainstay capital management, founder and ceo. shery: more coming up. this is bloomberg. ♪
biden, but the results won't necessarily produce a clear front runner to take on president trump. is bloombergw balance of power anchor david westin. david, great to have you. still a long time to go until november, but how problematic can it be, depending on which bulls and primaries we look at, still not seeing a clear favorite? david: this has been a pattern for the last few months and as you know, there are more candidates clumped together than normally we have at this stage in a presidential race, we have at least five candidates really in the running. bernie sanders is favored tonight, but you have to watch carefully because 42% of these voters are independent and if they break for pete buttigieg, in second place, he could overtake him. the other development is that buttigieg might make it more difficult for people like joe biden to continue. he has left the state and headed to south carolina because he didn't think he would do well
here in new hampshire. haidi: david, what is motivating voters to turn out? david: one challenge in new hampshire is interesting. there economy is going terribly well. they essentially have no unemployment read the biggest problem in the jobs market is finding enough skilled workers. they are concerned about health care. there is a huge opioid problem here. they have a big challenge with opioids and are very concerned with climate, because this is a source of tourism, a lot of the business here, ski resorts and things like that, so issues like that are very, very important to them, and trade, and they have some things on their mind, but a little different than maybe some of the rest of the country. shery: how much are voters still focused on who can beat president trump in november, the electability issue? david: yeah, that magical quotient we talked about in iowa. we talked to the former chair of the iowa democratic party earlier and she said address or nuts to talk about electability because she is not sure where you get it.
if you look at exit polls, substantial portion of democratic voters, the number-one priority is beating donald trump. but how do you equate that to voting for one candidate versus another, and that is not clear at this point. power" hostnce of david westin, thank you for joining us. michael bloomberg is also seeking the democratic nomination. he is the founder of bloomberg lp, parent, and he of bloomberg news. much more to come. this is bloomberg. ♪
♪ this is bloomberg markets: asia first word headlines. the coronavirus outbreak is said to cost china billions in losses. it may have led to losses in the retail and food sectors stretching into many billions of dollars in losses, with revenue declining 20% to 80% over the lunar new year, a fall of as much as 120 billion dollars as major domestic and international chains shut outlets across the country. ♪ the european union has requested the u.k. request to maintain continued access to the single market rate even if the county
-- single market. ritika:ritika: the top eu negotiator says -- the top eu negotiator says there won't be open-endedd ended -- liaison between the two sides. governor mark carney of the bank of england said he welcomes government focus on improving productivity and weaker areas of the u.k., saying if the rest of the country can match the city of london, the economy would be larger by one third. ♪ indian prime minister narendra modi's party has conceded defeat state election, the most significant test yet of his anti-citizenship law. ran andu nationalist bjp
aggressive campaign but has failed to win delhi for 22 years. ♪ senate republican leader mitch mcconnell is urging lawmakers to reject a bill that would restrict president trump's ability to take military action against iran. some republicans are joining democrats to curb the white following the killing of iranian general qassem soleimani. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. pta. ritika gu this is bloomberg. ♪ haidi: about half an hour of trading in australia, upside now in the asx, highest and about two and half weeks when potentially all sectors closed in green in yesterday's session.
kiwi stocks up 3/10 of 1%. i of that we heard from the finance minister -- i had dev that we heard from the fine matt ahead out of that we heard from the finance minister who warned of losses due to the coronavirus. we are watching for signaling and guidance as to whether more cuts may come to address the virus impact and we are seeing weakness in the kiwi dollar, strengthen the australian dollar, nikkei futures flat as japan comes back online from the public holiday, seeing positivity coming through in the u.s. futures sessions as well. they: let's get more on virus outbreak. it prompted washington to raise its travel advisory to hong kong, warning travelers to exercise increased caution when traveling to the city. the state department will also
allow nonessential personnel in hong kong to depart. let's go to bloomberg markets anchor yvonne man. what are the latest developments in the city? u.s. raising they travel advisory in hong kong to level two, exercising extreme caution but far from the level four advisory put on china, which is essentially, do not travel to the country due to the virus threat. this as we have seen cases in hong kong rise in the last 24 hours, total cases now at 49,000, and the latest cases are connected to a hot pot dinner that was shared by a family, all but a 62-year-old woman in a public housing area that was forced to evacuate tuesday. you mentioned the state department also letting nonessential diplomats and their families based here in hong kong to leave if they see fit.
this is on a voluntary basis at this point. the consulate, they say, will remain open. hong kong airport, also stepping up restrictions, now suspending all ground port -- all ground transport services to the mainland, so buses that travel to shenzhen and macau will be temporarily shut until further notice. yvonne, some unexpected fallout has been on passengers on cruise ships now stranded around the world. the luxury latest on liner that has been in limbo? yvonne: this is the cruise ship that has no destination right now. this is good, to show governments around the world are stepping up measures right now as they struggle to contain the virus. saysompany, carnival, there are no coronavirus cases on this vessel, but it seems they are running out of options. the who is offering a ray of
hope, saying they could sent health officials on board to check on the health of passengers soon. but it seems like, according to experts, that this cruise liner may be forced to wait until it goes into distress, or until they run out of food and supplies. of the seaese law conventions kick in. basically, that means any country close to that vessel will be legally obliged at that point to provide help or admit the cruise liners. that is what we are awaiting right now. the cdc is also voicing concerns about quarantines we have seen among cruise ships like the diamond princess, where 135 people contracted the disease. they say quarantines of such large groups of people could present issues, particularly when it comes to the elderly, who are at risk of complications for this virus. so they are now exploring what the safest option is. an extraordinary
situation. yvonne, we are also seeing more corporate fallout. yvonne: we have more news here when it comes to companies resuming production, airbus the latest to stay they will restart -- to say they will restart production at their factory in shenzhen. we also learned american airlines is extending suspensions on flights from the u.s. to beijing and shanghai, also from los angeles to hong kong, up until april 24, still a month later than what was originally planned. also, the route between dallas and hong kong will resume at the same time, and that has been delayed by another two months. that is what we have heard from airlines. when it came to the mobile world congress, the conference is hanging by a thread. it is set to kick off february 24, but a list of tech companies are now dropping out, mediatech, sony, intel, at&t, cisco, among others canceling plans.
according to our sources, organizers are having a video call friday to assess contingency plans and see if this show can go on. haidi: attendees are looking slim at this point. yvonne, bloomberg markets anchor yvonne man in hong kong, thank you. in the face of the coronavirus, china is doubling down on efforts to shore up growth. tuesday the finance ministry set sing.ew quotas for fundrai david: on top of what we already had in the original budget, it is another 122 billion u.s. bondss, special purpose are a smaller part of the $122 billion and goes into things like infrastructure project, so they should be a cashel attached to that.
they may tend to spend that portion of the fundraising on that as well. it looks like it is going to be earlier than expected, and to bring it forward is -- it is going to be bigger. bloomberg economics thinks that puts upward pressure on the budget deficit from 2.8% last year to probably 3% this year, and also signals it there is going to be fiscal support aided by monetary policy support. i have a chart i think shows it, sovereign and local government debt there. people's congress says it might indicate that we might get a change on when that meeting is going to take place. it is supposed to take place in early march, but it is an indication things might change as far as that is concerned. to indicate the changing
nature of this story, we have just had confirmation that japan will be banning tourist arrivals or foreign arrivals into japan. these are foreigners who have visited china, but not the epicenter of where we are seeing the coronavirus, but the eastern chinese province, and this is in response to the spreading of the outbreak of the new coronavirus and we have heard that has now been confirmed by the japanese government, shinzo abe speaking in tokyo. the rationale is that because the number of patients is increasing in that eastern province, according to government sources, we are now hearing that be confirmed. david, this follows globally the kind of ad hoc measures being taken by policymakers everywhere to try to contain this virus. how is this playing out on domesticof wiki -- on
equity markets and what are you watching and shanghai and shenzhen? movingthe 100 day average is something to watch, it is grinding higher. hong kong is a little bit above that level on the hang seng index, but both in terms of recovery from their respective reopened, let me just comment. stillentally we are seeing the business side of the impact and airlines come to mind immediately. that is a very, very, very, very busy route for airlines. the province is almost like guangdong, the cradle of entrepreneurship. provinceis inside the and is treated differently, but you have the town where alibaba so it is a fluid situation
it spans two different administration in -- administrations in the u.s. remove $40will billion of debt from softbank books. the bank could not be made to repay sprint debt if it were to revolve, but nevertheless a huge boost to the argument that this company should be worth more, they will now have numbers that make the point even stronger, but it also brings a difficult chapter to a close. out tok's owner set break -- to set up the world's biggest telecom company when he acquired sprint, now sprint has slipped and t-mobile has bought sprint. it frees up his hands to have more hands that have more money on his hands. our bloomberg tech
pavel, thanks. is senior market strategist from assymetric .dvisors, amir anvarzadeh does this remove a headache for softbank? yes, $40 billion of debt, although we think t-mobile is going to renegotiate the price is sprint, i think there little doubt they are going to reduce the price that they have ago.ed over a year balanceoes help the sheet. softbank's big problem has been its overstretched balance sheets on the group level, and this goes a long way in answering some of those questions. theously, sprint is not for
vision fund investment, so the vision fund will have problems going forward in regards to getting these companies back into shape in order to get an ipo. but as far as softbank itself is concerned, the merger approval is a huge positive. shery: haidi: haidi: -- what are your expectations for earnings? it was a punishing year, we had wewere, at the same, elliott management taking a stake in softbank and saying it is undervalued. what are your expectations? i think the last quarter is still going to be tough for because some share prices listed like uber hadn't really been re-rated until this quarter. uber had a good run, they are
forecast to go into profitability. alibaba has had a good run as well, that is the biggest chunk of their investment anyway, $160 billion valuation, so softbank has got a big stake in that business. last quarter, i think things are going to be still relatively tough in terms of valuations of their stakes, but this quarter is obviously looking very good. as i said, vision fund is going to have problems, we know it is having a lot of difficulty arranging money from outside and forcing softbank to raise maybe half the $108 billion investment they are looking to raise. be overall, i wouldn't surprised if softbank announces some sort of share buyback, which is something they announced at this time last year when they posted their earnings. shery: hold on a second.
we have breaking news coming from japanese media, gigi reporting 39 more people on the japanese cruise ship diamond princess docked in yokohama have coronavirus. an officerreporting in japan has tested positive for -- coronavirus out rake outbreak. we heard from shinzo abe moments ago that japan will ban visiting by foreigners from an eastern province as the outbreak continues to spread in japan. the defense minister, coming out and saying the quarantine officer one quarantine has coronavirus, confirming those reports. 39 more peopleng on that japanese cruise ship have coronavirus, according to japanese media. ands return to amir
discussed softbank in japan. mentioned earlier elliott management getting involved. will they finally be able to compel softbank to adjust their approach when it comes to these investments? amir: i think management is already been changing anyway, putting a lot of pressure on individual managers to improve profitability. we have seen that across the board. i think elliott's purchase was more opportunistic. i don't think son was standing still anyway, i think he was probably likely to buy back shares this year if he could, although obviously there is a cash flow issue, something that .as to be considered
for elliott was obviously a great investment in terms of timing, doing it just before the .print-t-mobile merger approval obviously there might be some adjustments, but i think those adjustments start really coming through after that disastrous q2 showing. we were seeing that already. seey: why do we continue to my coc son -- to see dpm -- to son so determined in continuing to launch that fund? growthhey were going for at any cost in the vision fund, and they are fully invested. remember, there is $40 billion worth of preferred shares of the and they are on the
hook of paying 7% interest. about 2.7 billion dollars that they have to pay, year in and year out, and that almost supersedes the management fee they are taking from that, so they really do need to launch another fund focused on cash flow, focused on short-term profitability, not just longer-term, and more on profitability rather than sales growth. so in order to complete this communication to venture capital, if you like, they really need to put a restart. and in order to restart, they have to launch another fund. otherwise, you will probably take some time before you see any of those big investments in the ipo. you, assymetric
advisors senior market strategist amir anvarzadeh. we have breaking news from the national security council call taking place at the moment. we are hearing from national security office or robert o'brien, and he is saying the coronavirus in china could curb china's u.s. agricultural purchases. we have had speculation and concern that the deal made at the phase-one deal, the many deal when it comes to agricultural and commodity and energy purchases, may need some reprieve before they can follow through, given we are seeing the and are mis-impact the coronavirus could have on the chinese economy, particularly for demand, and robert o'brien saying coronavirus could curb china's u.s. agricultural purchases, the u.s. national
♪ a quicket's get you check of the latest business headlines. bank earnings slightly beat expectations due to lending. just over 4% to the equivalent of 3 billion u.s. dollars in december, just above analysts' projections. shery: mastercard has a green light to set up a card business in china, gaining access to the payments market valued at 27 trillion dollars. mastercard annan's partners still need to complete operation work before asking for further
approval, but the card says the decision is encouraging. china had 8 billion bank cards in circulation that the end of september, 90% of them debit cards. ♪ haidi: boeing failed to any orders for commercial planes in january, for the second month in a row no interest in its jets. it extends a strain on boeing finances since two deadly crashes grounded the 737 max cash cow in january last year. january is traditionally a slow month for playmakers, but boeing shipped just 13 pre-ordered jets last month, compared to 46 during the same period a year ago. samsung has released a new galaxy flip phone after his previous attempt had a faulty screen. it is hoping to entice consumers with the new devices. we will have special coverage of
>> from manchester, new hampshire, i am david westin. this is a special coverage of the results of the first presidential primary of 2020, the new hampshire primary, as democrats continue their qu est. it is just 7:00 p.m. eastern time. willghout this evening, we be bringing new members. who is ahead, who is behind, how many voters will be showing up, but also the issues driving the voters of new hampshire. issues like the economy, health care,